You Buying or Selling?

Considering all that's going on with the economy, one might have expected suppliers coming into the recent New York Home Fashions Market to be in a panic.

They weren't. Most arrived in their showrooms knowing the economy was tough, believing it would remain tough for some time to come, and preparing as best they could to barrel through it.

I spoke to several suppliers who felt the moment might be ripe to make an acquisition or two. They said there are a number of companies knocking on doors and looking for a buyer. Everyone expects another shakeout on the supplier/manufacturer side.

No sooner did the market get underway than news broke about Lehman Brothers on the verge of liquidation and Merrill Lynch facing bankruptcy. Still, no signs of panic around the market. In fact, more than one supplier cracked jokes along the lines of: “And you thought the home textiles business was bad!”

Linens 'n Things was the subject of much discussion throughout the week. Some suppliers had signed the vendor agreement. Some hadn't. Nobody could say for certain what the future might hold — although everybody agreed further downsizing lay ahead. Everybody hoped there would be a future for the company. I spoke to chiefs of two companies who had met with acting ceo Michael Gries. Both were mightily impressed by the man.

Then, as the week was drawing to a close, the bomb dropped. The New York Post, using unnamed sources, reported that an undisclosed deal for LNT with buyout firm Cerberus Capital Management had collapsed. Liquidation, the Post predicted, lay just around the corner.

That piece of speculation rocketed through the market, setting off even more speculation. Was this a move by some unhappy bondholders to push the company off the cliff? Should suppliers re-think the orders they were queuing up? If the Post was right, who would be hurt first? Who would be hit hardest?

Then, the coup de grace — the Wall Street “meltdown.” Suddenly those jokes about the financial industry making the home textiles industry look good didn't seem so hilarious anymore.

In sum, it was a week in which suppliers and their customers grappled to put together winning formulas in a maelstrom of events beyond their control. A week like any other. And a week for the history books.